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Friday, September 21, 2018

BERTH AND PORT CHARTERS – LAYTIME/DEMURRAGE PROVISIONS COMPARED AND CONTRASTED

The choice of which form of voyage charterparty is to govern a particular fixture does have important commercial consequences.

Previous research by INTERTANKO suggests that the selection of standard charter party forms can have an impact of up to 4.5-5 Worldscale points if applied on a typical spot voyage scenario. In particular, it is the allocation of the risk of delay to the vessel that is treated differently.

The majority of voyage charter party forms are examples of port charters, Shellvoy 5 stands alone as a berth charter party. Clause 1 of Asbatankvoy provides as follows:

“The vessel …shall with all convenient dispatch, proceed as ordered to loading port(s) named…”

Whereas, Shellvoy 5’s (clause 3) stipulation as to the voyage the vessel is to perform is stated as follows:

“… the vessel shall perform her service with utmost dispatch and shall proceed to such berths as charterers may specify…”

There are significant differences in the allowance of delay in berthing under a berth and a port charter which need to be born in mind by owners when considering a proposed fixture. Whilst to many this is well known, it is worth perhaps highlighting some aspects of this. We will continue with Asbatankvoy as an example of a port charter and Shellvoy 5 as an example of a berth charter. Under Asbatankvoy the vessel is to tender Notice of Readiness (“NOR”) upon arrival at the customary anchorage at each port of loading or discharge. Laytime shall commence 6 hours thereafter or upon the vessel’s arrival in berth, whichever occurs first. If upon the vessel’s arrival the port is, say, fog bound, then following the decision in the Laura Prima the berth will not be reachable on arrival (clause 9) and time will run from 6 hours after NOR was tendered.

If the same factual situation is applied to a fixture on Shellvoy 5 then under clause 13 time will not commence to run as the berth will be deemed inaccessible due to bad weather. Time will only start to run when the vessel is not in berth if three requirements are satisfied, namely: i) the vessel is lying in an area where she was ordered to wait, or in the absence of any such specific order, in the usual waiting area and (ii) written NOR has been tendered and (iii) the specified berth is accessible. The clause includes a deeming provision as to what makes a berth inaccessible, and this includes bad weather, tidal conditions, ice, awaiting daylight pilot or tugs and port traffic control requirements. Therefore, it can be seen that under this form of charter, owners will have to bear the delay due to bad weather whereas under Asbatankvoy charterers bore the delay.

Other examples can be given highlighting the differences and the consequences to owners of these two types of voyage charter parties; however, the example given serves as a reminder. Furthermore, it should not be forgotten that there are differences between the major forms of port charterparties which need to be borne in mind. INTERTANKO has published commentaries and other texts on the major charterparty forms which members can seek recourse to on this subject.